Driving forces behind the construction of an eco-compensation mechanism for wetlands in China

Abstract

This research revealed important driving forces behind the construction of an eco-compensation mechanism for wetlands (DFEMW) in China. Using China’s provincial panel data from 1978 to 2008, a fixed-effects model was used to analyze the impacts of agricultural production systems on wetlands. We identified three DFEMW as follows: the change of wetland resources and protection measures in China; declaration and implementation of the provincial Wetland Protection Ordinance; and wetland degradation by agricultural production systems, which necessitated the establishment of a wetland eco-compensation mechanism. In addition to the DFEMW, a significant positive correlation between wetland area and both rural population and gross agricultural production was identified, in addition to a negative correlation with chemical fertilizer usage, reservoir storage capacity, and irrigation area. The underlying reasons for the serious degradation and inadequate protection of wetlands were market failure and government failure; these were the driving forces behind the need to establish a wetland eco-compensation mechanism. From a governmental perspective, it has been difficult to rectify market failures in resource distribution and thus to prevent wetland degradation. Factors include conflicts of interest, lack of investment, effective special laws, a simple means to protect wetlands, and a multidisciplinary management system. Therefore, the key factor is the coordination of interest relationships between those who utilize wetlands and those who seek to minimize wetland degradation and effectively protect wetlands.